A compelling company culture - One of the key pillars of employee engagement

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For businesses around the world company culture plays an essential role in attracting and retaining talent. To stay competitive company’s need the best people and to have the best people they need engaging company cultures. It is today one of the most important factors in why employees join a company, as well as why employees leave (see the section: why engaged employees leave).

Social media has become a powerful tool in helping to shed light on companies with bad working cultures. All across the world we are now more aware of examples where company culture has taken a turn for the worst and businesses need to be aware of this. The potential damage to companies goes beyond PR; it includes bad behaviour that negatively affects society at large, employee morale and damage to revenue.

Key takeaways

• Around a quarter of employees worldwide are extremely proud of their organisation
• The majority of employees feel a cultural fit with their company
• Larger companies are struggling to appreciate their employees

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Focus areas

Culture is a notoriously difficult thing to measure. Rather than attempting to do such a thing, Effectory’s global survey instead focused on three measurable outcomes related to company culture:

• How proud employees are of their organisation
• Employees’ fit with company culture
• Appreciation

Experience has taught us that when employees are positive about the three aspects above, it indicates the presence of a compelling company culture.

Being proud of your organisation

The newest generations in the current workforce differ in several ways from the older ones. One of the most pronounced differences is how younger employees pay particular attention to an organisation’s impact, its standards and the type of work they do.

Employees today want to be proud of their organisation. Working at a company that is a positive influence on the world is an important factor in determining the kind of company people want to work for. It also influences retention rate, as employees are more likely to look for alternatives when they feel a company does not positively contribute to society.

For businesses, when employees are proud they are also generally very committed to the organisation and its values. Employee commitment – or the bond employees experience with a company – is valuable for several reasons. A committed workforce is more determined, more proactive in their support and has a relatively high productivity. Commitment is also linked to positive behaviour within companies and higher retention, as well as positive referrals from employees.

Current state of affairs

Around one quarter of employees worldwide are extremely proud of their company. Whilst a significant proportion of the global workforce is positive, businesses should be wary that employees’ belief that their organisation is a good organisation to work for has – over the last two years – become less positive.

Employee opinion varies per region. As many as one third of employees in Africa are extremely proud of the organisation, whereas as little as 18% feel the same in Asia. Workers in both the Americas are prouder than the global average. Specifically, 35% of North American employees state they are immensely proud of their company. Bunched together, Europe and Oceania are closest to the global average.

Industry

Across industries the most proud employees can be found in the more traditional industries such as education and agriculture, as well as in the more modern industries of media and telecommunications. Those working in construction and engineering also display high levels of pride.

At the opposite end of the pride spectrum, the workforce in high turnover industries such as hospitality and production are least proud of the company they work for. Perhaps alarmingly for those running countries, people working for governments are also some of the least proud employees.

How to enhance employees’ pride

• Make sure the organisation’s identity is distinct and visible. What does your organisation stand for? What are its aims? Only when a company forms a clearly recognisable identity will employees know if it is something they can be proud of.
• Celebrate successes and good deeds with one another; each one provides the nutrients for a feeling of pride.
• Collectively ensure that there are engaging and positive targets, whilst making it clear how everyone can contribute to the joint goal.

Cultural fit

A good cultural fit and feeling at home in a company are important for a number of reasons. Firstly, the two contribute to organisational commitment. When employees have a good fit with an organisation’s culture they are much more likely to be committed.

Secondly, a good cultural fit provides employees with the emotional security they need to perform and excel in their role. If workers are constantly worried about their position and fit in a company, energy is diverted away from core working tasks. Over time, this negatively impacts the ability of employees to perform their work, as well as employees’ mental well-being.

Lastly, Effectory’s previous research, including extensive studies within Europe and global multinationals, has time and time again demonstrated a clear link between cultural fit and employee engagement. In the vast majority of cases, fitting in at companies is one of the most important drivers of engagement at work.

Current state of affairs

Three quarters of employees globally feel a cultural fit with their organisation. Positively, no global region has less than two thirds of employees that fit in. Cultural fit reaches levels over 80% in both Africa and North America, with more than one third stating they feel a perfect fit with their company.

Cultural fit in South America is also very high, whilst more than three quarters of employees in Oceania feel at home. Across the six regions, businesses in Asia have the largest percentage of employees that don’t feel at home, whilst levels of culture fit in companies in Europe fall slightly
below global levels.

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Age & Tenure

By far the best cultural fit occurs with organisations’ oldest employees. The employees that feel most at home are in the age bracket of 66+. All of the age categories were similarly positive, with the exception of the most senior employees who feel a noticeably bigger fit.

In similar fashion, employees that have also been at companies longer than 21 years also feel they fit a company’s culture well. Considering the length of their tenure, this is perhaps not surprising. Those with the best fit have been at companies between 6 and 10 years, whilst those at the very beginning of their tenure (less than a year) feel the least fit with their company culture.

How businesses can ensure cultural fit

• Make sure that employees are clear about the corporate identity. Employees only know if they feel at home if they know what the organisation stands for (mission/vision) and what is important to the organisation (standards/values).
• Create shared experiences among employees, as they reinforce a feeling of belonging and commitment. Some of the most effective activities are personal or intimate meetings, as well as company-wide events.
• Involve employees in and communicate about company-wide decisions. This helps to ensure support of the decisions, as well as clarity about the employees’ thoughts and feelings.

Appreciation

At its most basic form, appreciation is an acknowledgement and gratitude for the effort one puts in. Sadlyfor both businesses and employees, appreciation is often overlooked and instead replaced by criticism or points for improvement. When this becomes the norm, employees are more likely to lose their passion at work and become demotivated.

The effects of appreciation in the workforce are, on the other hand, substantial. Appreciation at work acts as a key driver of engagement and commitment. When employees feel appreciated, they are more willing to make a bigger contribution and to try their best. Going the extra mile no longer seems a drain as individuals know colleagues will be grateful and their extra effort will be acknowledged.

At the collective level, appreciation helps create an energetic and positive environment. Employees get a far greater enjoyment from work in such environments. Businesses also benefit from the extra motivation and innovation that positive environments create, as well as higher retention rates.

The current state of affairs

One fifth of employees around the world feel that they are really appreciated by their company. North American businesses lead the way, as nearly one third of employees feels they are very much appreciated.

The degree to which employees feel really appreciated in Oceania and Europe closely resembles the global average, whilst those levels increase to 25% and above in both Africa and South America.

Lagging behind the other regions, just 16% of workers in Asia feel they are really appreciated by their employer.

Organisation size

Trend analysis from the global survey suggests that the larger organisations are struggling to appreciate their workforce. Those working in organisations with 1000-5000 and 10.000+ employees feel that they are currently under appreciated. Trends do however show that it is not just large organisations that struggle. Companies with between 200-500 workers also struggle when it comes to fully appreciating the efforts of their workforce.

Comparatively, the smallest organisations perform best when it comes to appreciation. Employees feel very much appreciated. In between the two extremes, there is a large variety in appreciation from organisations with 100-200 and 500-1000 employees.

How businesses can appreciate employees

• Thank those employees that have performed outstandingly well. Paying attention to those employees that have put in a lot of effort or have successfully overcome large challenges makes a big difference.
• Try to rectify any remuneration situations that are deemed to be unfair. If it is not possible to do so, provide a clear explanation why.
• Put effort into creating an environment where employees feel comfortable in sharing their successes. Regularly setting time aside for employee appreciation and sharing examples of outstanding work are two examples that can help in this.